Bill proposes using PG&E fines to pay for upgrades

California's legislature could have a big impact in reducing how much PG&E customers have to pay for the utility's pipeline upgrade program. There are a couple of bills in the works that use PG&E fines to pay for upgrades rather than boost the state's general fund.

There are currently three penalty proceedings against PG&E under way at the California Public Utilities Commission. The outcome could be in the hundreds of millions of dollars, which could go a long way towards preventing rate increases if the law will allow it.

The Glenview-Crestmoor neighborhood of San Bruno is abuzz with construction replacing some of the 38 homes destroyed in a 2010 natural gas pipeline explosion. Now, PG&E needs to upgrade its pipeline system at an estimated cost of $5 billion over 50 years.

Assemblyman Jerry Hill and State Sen. Mark Leno have come up with a plan they hope will save ratepayers from paying most of that bill. Regulator fines levied against PG&E would go toward covering the costs of the upgrades instead of into the state's general fund. "The minimum expected fine of $200 million, if applied toward pipe replacement, would save ratepayers about $660 million. A fine of $600 million would save ratepayers over $1.6 billion," Hill explained.

"We don't have a position on Assemblyman Hill's bill specifically, but we are in support of the concept and in fact, we have registered our support for a similar bill that [State] Sen. Leno introduced earlier this year," PG&E spokesperson Brian Swanson said.

"I hope it goes through and I hope they're not going to raise our rates and charge us for something they should have been doing all along. This should've never happened," San Bruno resident Bill Bishop told ABC7 News.

Hill introduced Assembly Bill 478 Tuesday. It will be heard by the Senate Energy and Commerce Committee on July 12 at the earliest.